The Letter of Expectations of the Majority Shareholder has been updated
AB “Ignitis grupė” (hereinafter – the Group) informs that on 11 May 2023 it received a letter of expectations (hereinafter – the Letter of Expectations) from the Ministry of Finance of the Republic of Lithuania, which owns 74.99% of the Group's shares (hereinafter – the Majority Shareholder), where it expresses its expectations regarding the continuity of the Group's strategic objectives.
The Letter of Expectations was updated in the light of the geopolitical situation and a growing need to prioritise green generation development while ensuring energy security in the region. The Majority Shareholder’s expectations regarding the strategic objectives of the Group remain consistent with the expectations laid down in the previous letters, however, the new wording prioritises green generation development, ensuring energy security and improving customer service quality even more.
More information below:
The Group should prioritise focused, sustainable and profitable development of green generation capacities in order to significantly contribute to the energy security and green transition in the region. The Majority Shareholder notes in the Letter of Expectations that the Group should continue to look for ways to increase electricity generation and should invest in electricity generation from renewable energy sources both in Lithuania and other EU member states. The main green generation technologies the Group should invest in include offshore and onshore wind, solar energy and hybrid technologies. The Group should mainly focus on preparation for offshore wind projects in Lithuania and their successful implementation. The Group should also explore investment opportunities in energy storage solutions (e.g., hydrogen, batteries, synthetic fuel, etc.).
The Majority Shareholder underlines that the Group must ensure the availability and the long-term operational capacity of the infrastructure that is important for national and energy security, including the operational facilities of Elektrėnai Complex.
Customers & SolutionsThe Letter of Expectations stipulates that the Group must strive to increase electricity supply in the region by supplying final consumers with clean energy generated by its green generation assets as well as ensuring good customer experience. The Group should prioritise the expansion of its customer portfolio and utilising it to conclude PPAs to enable development of green energy generation capacities. The Majority Shareholder emphasises that the Group must seek to exploit the benefits of the economy of scale while providing competitive and affordable energy services for private and business customers as well as ensuring high-quality customer service
The Letter of Expectations also highlights the importance of ensuring the resilience of the electricity distribution network to external factors, efficient distribution, network development, facilitating the energy market and electrification in Lithuania. It also stipulates the necessity of investments into connecting new electricity consumers, electric vehicle (EV) charging stations, expanding electricity network capacity and developing related energy markets (electrification of transport, industrial, heating sectors). The Group should also automate the electricity distribution network management, digitalise the network, implement the smart meter programme and ensure that the network reliability indicators are within the set norm.
Additionally, the updated Letter of Expectations stipulates the expectation of the Majority Shareholder regarding a higher return on capital employed, i.e., while implementing its strategy, the Group must ensure at least 6.5% adjusted return on capital employed (ROCE).
You can read the Letter of Expectations in the attached document.
For more information, please contact:
Head of Corporate Communications at Ignitis Group
+370 620 76076